tv [untitled] September 8, 2010 10:30am-11:00am PST
it's not a big deal, but it's something that i want to bring to your attention. the airport would get no portion of the advertising revenues if you permit bart to advertise at the airport. however under prior agreements between the m.t.a. and bart, the n.t.a. actually receives advertising revenues from bart in all bart stations throughout the bay area. and in this particular case if you approve this agreement, it's estimated that the n.t.a. would receive about 15% of $64,000 in fiscal year 2010-2011. this is based on the minimum annual guarantee bart gets from its advertising contractor, and about 15% of $487,000.
so that's -- the n.t.a. would receive a minimum based on that of about $467,000 from bart and that's through september 30 of 2018. the airport receives no revenues. on the other hand, if you approve this agreement, the free shuttle bus, which is costing the airport over $500,000 a year, will be eliminated. so that certainly is a benefit and it's already been explained the benefit to the employees by getting the reduction from $4 to $1.50 in order to go directly to bart. supervisor, i think that's the important issues in our report. and because of the aesthetics issue which members of the board of supervisors has raised in the past, we consider this matter to be policy for the board of suse
advisors. commissioner avalos: thank you, mr. rhodes. any other questions? on this contract? then let's go on to the lease item. >> supervisors, i will address item number 9 which is what we hope to be one of the last, there may be one other coming, but you have approved over the last few months a series of new leases for the terminal 2 opening which we hope will -- we anticipate to be opened spring of this year. or 2011. this is a piece of the larger concession program that you approved. this was something that came in originally and staff decided some of the concepts we received could be flushed out a little bit. so this went back and came in on its own. this is a new lease in terminal 2 with host international to operate a news stand, coffee,
and specialty store operations. it consists of five separate spaces, only one of which is presecurity, a coffee shop. there is a large news stand and gift store, another small news stand in another location, post security. a clothing, retail outlet, and specialty keels outlet. it consists of five different sites under this one lease with host. the lease term is for 10 years. and the grant with no options to extend. the rent is the greater of either a minimum annual guarantee or the formula of percentage rent based on gross revenues that you have seen on all the other leases. the mag for this lease is $1.12 million, although based on the protections of sales we believe that this contract will be paying on a percentage rent, at least in the first year, with an estimated rent in the first year
of $1.320 million. the award of this lease is based on a competitive request for proposal process with host deemed to be the most responsive and responsible there. i would be happy to answer any questions. >> thank you. commissioner avalos: thank you for your presentation. mr. rhodes. >> mr. chairman, members of the committee. this was an r and p process. host has been recommended as the winning bid iror proposal. i would point out on page 2 of our report that host has bid the lowest minimum annual guarantee of $1,126,000. i point that out just a as a matter of fact. however when you consider all of the criteria that the airport used in their evaluation, host is the winning bidder and we do not question that. we recommend that you approve this legislation.
commissioner avalos: great. thank you. so we are about in terms of the incidents for the first year of the lease we are about $200,000 over the mag? >> yes. based on projected sales for the five different locations. both host and airport staff has looked at the projections and agreed they will most likely pay the percentage rent not the magazine commissioner avalos: i found it interesting in the report -- mags. commissioner avalos: i found it interesting in the report, one of the primary factors being considered, that there are a lot of bids that turned out to be not able to get to the mag. i'm wondering how common that was in the past just for my own information. >> i believe that that may have been part of why this is separated out from the original package that came to you. airport staff who looks at these mags and traffic and projected
sales i think we are just not comfortable with the concepts that were originally prevented. meaning they probably wouldn't going to get close to their mag. commissioner avalos: was that paced on experience? a -- based on experience? >> i think it's based on looking what happened in the past. location of the different sites. and the traffic that we anticipate to be moving through there. that is why i believe this came as a separate item. they brought it back in house to re-evaluate and look at different concepts that would ensure better success so that we would prefer that they exceed the mag, obviously, and pay on a percentage of gross revenues. but that everyone was more comfortable they could get close to the mag and we wouldn't have to come back and say we need to re-evaluate this in the future. commissioner avalos: thank you. supervisor elsbernd. commissioner elsbernd not so much a question as it is a
complement. if you read or anybody read the articles from the "l.a. times" over the weekend about all the horrendous bidding process that is happening down in l.a.x. for the concessions down there and how it goes on and on and on and on, i just say to any airline watching, anybody considering do we want s.f.o. or l.a.x., watch the process here, see how it works and your answer will come to you quite quickly. >> thank you, supervisor. commissioner avalos: supervisor mirkarimi. commissioner mirkarimi: thank you. earlier this year we had a conversation with director martin and the question came up and wasn't answered at the time and said he would get back to us is this is considered san francisco property, correct? so that when businesses are contracting with the city, the question was is, what level of compliance was there our work force for source agreements for these contracts extended on
airport property? so in this particular case, how would that play itself out in terms of their requirements and compliance in hiring people as it sees fit with our local first source hiring requirements? >> if memory serves, i know that we looked at the extensively during the budget process. i do think something was produced. i will make sure that whatever it was we gathered i get to you. my recollection is that the first source hiring requirements are part -- will be part of these new leases as they would be with any contract. we would use the language that the city requires us to use with any new contract. so the first source requirement language would be a part of these -- is a part of these new contracts. commissioner mirkarimi: can you just confirm that this is exactly the automatic sort of part of your system as well, too?
there had been some confusion in the conversation if that was really the case or not. >> i will confirm it. my memory was that we -- the language, first source language is required to be included but there were some questions about the reporting that happened after the fact. i will confirm that for you. commissioner mirkarimi: thank you. appreciate that. go to public comment. commissioner avalos: we can open this up for public comment. these two items. item number and 9. two 8 an 9. we'll do two minutes. >> budget and finance pauler paulsen. i see they'll be leaving on a bart train, ♪ and i hope that it's a good prize oh, i know you like to ride the bart train there's so many stations you can be found
and the price is great all around i know it will be good all the time you're leaving on a bart train and i know the price is going to stay the same oh i know you like to ride the train and you can be found in every station along the way and i know you're going to make it good today and come fly a good concession price come fly come fly away it's going to be great you're going to fix it the price because that's going to be done today come fly with me let's fly with me let's make pack it up and let's pack the price up and fly away
in city land it's going to be a good concession price today and we're going to fix it up and fix it up the way the city way come fly with me come fly a good price for this concession item nine and eight today ♪ commissioner avalos: thank you. if there are no other members of the public who would like to comment on these two items we'll close public comment. and colleagues,. >> motion to advance with recommendation. commissioner avalos: ok. we'll take that without objection. those two items will go to the full board with recommendations. mr. young, if you can call our last item, number 10, please. >> item number 10, resolution authorizing the lease of 1,426
square feet of space, a license of 2,400 square feet and the shared use space of 1,360 square feet to the elias m. nasra and family partnership, california general partnership, and city hall low created at 1 dr. carlton b. goodlett place. commissioner avalos: welcome. >> welcome back. members of the committee. assistant director of real estate. so i want to give you a little bit of background as to how we arrived at what's before you today. back in early 2007, mccall, who is operating a mobile cafe operation in the north light court terminated their lease. following that termination we decided to pursue a social enterprise and cafe operation in the north light court. and this board approved a
recommendation to have juma ventures operate that which lasted from spring of 2008 until, unfortunately, spring of 2009 when their financials were just not performing at all. so they elected to affect and early termination. there was a penalty associated with that early termination in terms of forfeiture of their security deposit. which actually made the city financially whole until currently. now it's in agreement that results from a competitive solicitation process an offering of one operator for both the north light court and the ground floor cafe. we are not recommending the current operator, chaun su park and i'm personally handling discussion was her counsel to ensure that our transition to a
new operator should what's being presented is approved is smooth and any funds potentially owed for unadvertised value of improvements or other things associated with her initial lease are fairly lined out and she's compensated accordingly. those discussions will go on a separate track add mrltively in accordance with her current lease. the item before you today is simply the new lease. what i'd like to do is introduce your new building manager who we promoted back in december of 2009, rob ryder, don't know if you had a chance to meet him. he will provide you with the details of the current lease under consideration. commissioner avalos: thank you. mr. ryder, welcome. >> thank you very much. the lease before you is a five-year term lease at $1,500 a month or $18,000 a year. the -- it also has a c.p.i. index in terms of increases.
the operation of the north light court lease and ground floor lease will be as john updike mentioned, a unified operator. the cafe on the north light court will be offering other amenities, sundries, a wifi service, paper magazine, period cals -- periodicals, a small flourist as well. under this lease the operator will be using sustainable foods and healthy food choices, compoastable utensils, etc. if you have any questions, i can answer those now. >> thank you. >> mr. chairman, members of the committee. as has been stated this was an r.f.p. process. the winning recommended bidder is elias m. nasra and family partnership. you can see on page 3 of our
report in table one their rental bid amount of $1,500 or $18,000 a year. we recommend that you approve this legislation. i would point out that if you look over the past several years, actually this $18,000 represents an increase of about $9,000, $9,796 more than what we had been receiving in prior years from the nonprofit. that's simply a fact based on the r.f.p. process just by itself we would recommend approval. commissioner avalos: thank you, mr. rhodes. supervisor? commissioner elsbernd a couple questions. should this get approved in the normal legislative process, the new operator would take their place on what date? when would people be purchasing from somebody new downstairs? >> approximately end of october,
first of november is likely our transition date. commissioner elsbernd then the budget analysis report did not have this. not that they should. are there any existing facilities that the winning -- the proposed contractor currently operates that would be examples that we would know? >> yes, good question. currently the family operates the facility at the courthouse. also recently awarded the operation in the lower level cafe at the main library. which is -- has been a successful venture there as well. commissioner avalos: if we approve that, was that early this year or last year? >> i believe it was early this year. commissioner avalos: just a question i have. i know the current leasee downstairs has been concerned
about -- you referenced them, mr. updike, in your presentation that there's still some contention about capital improvements that have been made there and whether there's going to be -- you are working that out with your counsel you said. could you say more about that? is it something you can talk more about? >> the issue is simply the initial cost to acquire furniture, fixtures, and equipment upon her assumption of the prior agreement between l. and l partnership who received the first award for operation of that ground floor, and then she was assigned that particular right. and acquired some restaurant equipment at that time. so we are simply negotiating whether consistent with the lease there might be funds owed as a result of an inability to amortize that value of those
improvements. we believe that sum will be relatively nominal because the lease has run out for its current term. and any extensions available is currently on a month to month situation. we are going to do our utmost to be as fair as we can for her. commissioner avalos: thank you. commissioner mirkarimi: one question was answered regarding other businesses f. there were others the nasra family has facilitated. it's a good answer. thank you. have we ever required there to be a uniform vendor between the north light court and downstairs as well? or is this the first time? >> since the remodel, yes, this will be the unified operation and it will solve the logistical and competition issues we have had in the building. we are looking forward to having unified operations.
commissioner mirkarimi: it sounds cleaner and more fluid. what is the savings in that regard in us being able to link up the ground floor and the basement? >> i think the budget analyst hit the nail on the head in terms of the revenue we are expecting. i think it's reflected in the response when one operator has the ability to capture the entire marketplace for food service in city hall. it's a pump in our revenue. there's some, i think, efficiencies that are gained by sharing the furniture and fixtures that drive both operations. so there's some efficiencies by the operator. that's reflected in the revenue paid to the city. commissioner mirkarimi: there was also an attempt a few years ago after the remodel to restale san francisco-only frod -- products in also north light court s there any discussion about resurrecting that as well, too? >> i would simply say informal,
we have tossed that idea around over the last couple years since city store ceased to exist on that area of the north light court. this begins to bring that concept back in terms of having a little bit of retail beyond the existing cafe operations. i think this gives us perhaps a chance to test some things out. commissioner mirkarimi: the current operator in the basement, were they not able to provide, i think, what would be the hopeful sort of answers to running both ground floor and basement operation? >> i think the ratings included in the package would speak for themselves. we did have a robust group who assisted rob in vetting the proposals and scoring them. so we felt comfortable with the committee's recommendation and their scoring. it really wasn't -- quite a
large spread from first to final place. a commissioner mirkarimi: thank you. commissioner avalos: just a question, mr. updike, i know one issue with the north light site is that it will be intermittantly used. how is that going to be accommodated for in terms of any capital improvements? if there's not going to be a kitchen in place, how will that function with the downstairs kitchen? >> the north light court operation is to retain its mobility so we don't get in the way of special event revenue which is so crucial to the operations of city hall. we worked closely with the special events group to assure we got a process that's solid for any early close up of the operation so that the event staff can move in and mobilize. that's not unlike what we have done before when both mccalls was operating and jumo was
operating. we had a smooth process. commissioner avalos: storage as well for the vendor? >> yes. there is storage. that's part of the premises description in the package. commissioner avalos: food prep? >> will happen downstairs. >> we believe so, yes. commissioner elsbernd one more question. in the past, i'm not sure if it was executive orders or what the press release or what the mayor has talked about, mandates about, no soda machines, things like that. are there going to be restrictions on what this vendor is able to sell and what they are not able to sell? >> yes. consistent with the executive director directive relative to healthy foods initiative, actually the existing vendor has working with the current vending machine operator, has changed the product in the lower level. if you take a look there are new healthy food options. that are in conformance with the
directive. and our incoming operator has indicated a willingness and openness encouraging -- commissioner elsbernd will super ayesor campos and i still be able to get the diet coax downstairs? >> yes. commissioner mirkarimi: that's so much healthier. commissioner avalos: i like the sound of diet coke opening in the board chamber, actually. ok, we can open this up for public comment. any member of the public who would like to comment, please come forward. >> ♪ north to the north light court we're going to fix it up north to the city hall north light court we're north we're going to fix it up north to alaska we're going to north we're going north to fix it up you're a smooth operator
smooth operator north in light court north fix it up now fix all the sale you're a smooth operator smooth north court light operator fix it up and north end sales fix it up today crazy crazy for wanting better mental health crazy crazy to want to fix it up crazy to think that this building could hold you i'm crazy for crying and crazy for trying and i'm crazy for loving and wanting to fix it up for you
this court this place was always on my mental health mind it was always on my mental health mind tell me tell me you're going to make it better all the time please fix it up fix it up make it real great fine today ♪ commissioner avalos: thank you very much. we can close public comment. did mr. rhodes talk about this? you did. so colleagues, can we move this forward with recommendation? without objection. very good. i believe that is our last item. so we are adjourned.